Taxation & Estate Planning

Avoiding a Federal Tax Lien

By Darrin Mish

A tax lien is a serious step taken by the IRS when all other attempts to collect taxes from you have failed.  If you have a tax lien enforced on your salary it can absolutely destroy your reputation and credit standing.  Here are a few things you can do to avoid such a thing.

Firstly, it is important to know that a tax lien is never issued without prior warning.  So as soon as you receive any correspondences from the IRS to that effect, you need to respond immediately by contacting the IRS and speaking to them about your tax situation.  If you ignore these mailings, you will not be shown any mercy by the IRS when it comes to putting a federal tax lien on your pay.  Then when you are in contact with the IRS, be sure you respond politely to them.  This will go a long way towards averting a tax lien.

If there were any years in which you did not file your tax returns, you should do so at once.  This could be because you felt you were not taxable or because you simply forgot.  In such a case, the IRS would almost certainly require you to file your back taxes.  To show you are serious about clearing your tax debt, you should make the filing.  Again, this simply shows that you are taking their requests seriously and you are doing everything you can short of paying off your balance.  This is another way you can avoid a tax lien.

You may have already been audited in which case you may have misrepresented your tax figures (most people have done so at one time or other).  If you want to avoid a federal tax lien, you need to start telling the truth.  You will not only exonerate yourself from the mistruths you have been telling, but you will be able to get the help you need and get back on the road to recovery.

The most important thing to do to avoid a tax lien is to make whatever payment you can, even if it is only $20 a month.  This shows your sincerity in trying to pay up your tax dues.  If you are being honest, they will see your entire financial picture in front of them and know that you can only afford so much per month.  It is only when you decline to pay anything at all do they tend to get nasty.

These are some of the simple but important things you can do to avoid a federal tax lien.

Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.

Avoiding a Federal Tax Lien is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on March 06, 2010 (boomark / email).